Archive for the ‘Energy’ Category

The Tillerson confirmation hearing reminded me at times of hearings for Supreme Court justices in that Tillerson refused to answer the vast majority of questions about his views or what he would do as Secretary of State. At the same time, he gave plenty of evidence that he would be a disastrous Secretary of State. Here are some specific pieces that jumped out:

1. Tillerson claimed that Exxon did not lobby against sanctions in response to Russia’s actions in Ukraine. Sen. Corker interrupted to note that, actually, Tillerson had called him personally to discuss sanctions. When Sen. Menendez later confronted Tillerson with records showing that Exxon lobbied on the sanctions, Tillerson still claimed ignorance, saying he didn’t even know whether the company would have lobbied for or against the sanctions. This is damning for Tillerson because there are only two possibilities: Either he is lying, or he is a shockingly poor manager – someone who was unaware of his company’s position on an issue of enormous importance, sanctions that compromised a $500 billion oil exploration deal. AP did a good fact check on his statements.

2. On climate change:

Tillerson continued to dispute and deny settled climate science, claiming to Sen. Markey that it’s “inconclusive” that climate change makes extreme weather more likely.

Sen. Kaine set out to grill Tillerson on climate denial — and particularly allegations that Exxon knew fossil fuels cause global warming as early as the 1970s and yet to this day is funding groups that deny and cast doubt on climate science. He quickly hit a dead end because Tillerson simply refused to answer whether those allegations are true or false. His first line was that he no longer works for Exxon and the question would have to be put to them. When Sen. Kaine asked, “Do you lack the knowledge to answer my question, or are you refusing to answer my question?” Tillerson responded, “A little bit of both.”

Tillerson refused to say that the U.S. should be an international leader on climate. He said only that we should keep “a seat at the table.”

In response to Sen. Shaheen’s question about complying with international agreements to end subsidies for fossil fuels, Tillerson said he wasn’t aware of any U.S. fossil fuel subsidies. Only tax code provisions that apply to all industries. Another place he strangely lacks key knowledge about his own company and industry.

Tillerson told Sen. Markey that he doesn’t think climate change is an imminent security threat. That might be the most disqualifying thing he said all day. We can’t have a Secretary of State who doesn’t take seriously the most terrible threat to U.S. security.

3. Tillerson refused to answer countless questions about bad international actors — for example whether Putin is a war criminal for bombing civilians in Syria and whether Philippine President Rodrigo Duterte’s well-documented extrajudicial killings constitute human rights violations. He dodged every question, no matter how well-known the underlying facts, by saying he needed access to classified government information before he could render a judgment. I don’t recall a single instance in which Tillerson was willing to say that someone has engaged in human rights abuses or is war criminal. It’s not my area of expertise, but I thought he come across as ill-informed (if not simply unconcerned about serious problems in the world) and overly reliant on a pre-fabricated dodge that was often a poor fit for the question he was being asked.

Since President-elect Donald Trump announced his choice of Exxon CEO Rex Tillerson for Secretary of State, people have been speculating about how Tillerson and Exxon might deal with an ethics problem: Tillerson has around $180 million worth of Exxon stock that will vest over the next decade. He can’t hold on to it if he becomes Secretary of State because that would create a clear conflict of interest: He’d have a strong interest in boosting Exxon’s stock value.

Yesterday, Exxon and Tillerson struck a deal that media outlets are characterizing as severing Tillerson’s ties with the company. The basic terms are that Tillerson’s non-vested stock will be cashed out and the money placed in an irrevocable trust, with a slight discount, from which Tillerson will receive payments over 10 years. If he goes back to work in the oil and gas industry within 10 years, he forfeits the remaining money and it goes to a charity of the trustee’s choosing. In other words, Tillerson gets payments over time that aren’t linked to Exxon’s performance, and he has a strong incentive not to go back to his industry, so he won’t favor it while in office.

But maybe it’s not that simple.

We found a discrepancy in the documents Exxon filed with the U.S. Securities and Exchange Commission. The filling contains two agreements, one between Exxon and Tillerson, and one between Exxon and Northern Trust Company, which will serve as the trustee. The contract between Exxon and Tillerson says the CEO will forfeit all remaining assets in the trust if he works for the oil and gas industry in the next 10 years. But Exxon’s agreement with the trustee says that Tillerson forfeits the trust assets if he engages in “competitive” employment in the oil and gas industry – in other words, employment with any company other than Exxon.

So which is it?

The difference matters. If, under the trust agreement’s terms, Tillerson can continue to receive payments if he returns to work for Exxon during the next ten years, but not if he works for any other oil or gas company, then he retains a strong interest in Exxon. Not only would he want Exxon to perform well during his tenure as secretary of state, he’d have an incentive to advance the interests of the only company in the field where he could work – and still receive the huge trust payments – over the next ten years. That’s a far cry from eliminating his interest in the company.

Senators should ask some tough questions about this deal at Tillerson’s confirmation hearing.

 

Note: Under Exxon’s current policies, the company couldn’t re-hire Tillerson as an employee because it has a mandatory retirement age of 65. But the company presumably could hire him as a consultant or contractor.

Today, Senator Sheldon Whitehouse (D-R.I.) and several others are introducing a resolution that links the current denial of climate science to the campaigns by tobacco companies and chemical and lead companies to deny the now well-known harms of tobacco and lead products (primarily lead paint and leaded gasoline). Today and tomorrow, nineteen senators are taking to the Senate floor to speak out on the network of climate denial groups. Follow and support the effort with #WebofDenial and #TimetoCallOut.

You can become a citizen co-sponsor of the resolution here.

Here’s my statement on the effort:

We applaud Senator Sheldon Whitehouse and others who are calling attention to the web of denial surrounding the harms from fossil fuels. They are right to draw parallels between the campaign of deception on climate science and those on tobacco and lead products. Climate denial follows a script written by Big Tobacco and the chemical and lead industries: Fund a network of phony think tanks, research institutes and policy shops to sell lies and distortions, foster doubt and stall solutions to clear, immediate dangers to public health.

There is one major difference. If left unchecked, climate change will be far more terrible. Tobacco and lead products have killed or poisoned millions. Today’s climate deniers risk much more terrible harm: heat, drought, famine, disease, mass migration and violent conflict on a scale that threatens human civilization as we know it. If the deniers have their way, they even risk human extinction.

We wholly support senators who are calling out climate denial as the despicably immoral action that it is – and those who are working to mitigate catastrophic climate change by moving the U.S. quickly to a 21st century, zero-carbon energy infrastructure. That shift will create jobs, stimulate the economy, lower energy prices for consumers and, most important, help us preserve our own habitats and civilization.

There may be no greater patriotism in American today than fighting climate change, and no greater disservice than denying the problem and stalling solutions.

And here’s a shareable graphic from our patriotic friends at Desmogblog:

 

Public Domain image via Wikimedia Commons

Public Domain image via Wikimedia Commons

Queen Victoria commissioned a celebratory painting of Manchester, citadel of the Industrial Revolution, which featured factories billowing sunlit pillows of smoke. Today we might forgive this romantic view of pollution as rooted in the ignorance that the smoke was a regrettable toxic byproduct that poisoned countless people in England.

Yet today, such misplaced celebration of industrial ills persists in the promiscuously large paychecks awarded to energy company executives. That’s according to a report just released by the Institute for Policy Studies.

“Money to Burn,” authored by Sarah Anderson, a veteran CEO compensation observer, critic and reform activist, surveys and analyzes executive pay at the leading fossil fuel companies. She finds that executive pay at the 30 largest firms average $14.7 million, about 10 percent more than average pay for CEOs at the S&P 500. But Anderson exposes a dystopian dynamic. “Our contemporary executive pay incentives . . . directly encouraged the reckless behavior of Wall Street executives that led to the 2008 financial crisis,” she writes. “These same misplaced incentives are today encouraging the recklessness of fossil fuel executives — and deepening our global climate crisis.”

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Today the Union of Concerned Scientists (UCS) released a fantastic study finding that the EPA’s proposed Clean Power Plan underestimates how much progress we can make on renewable energy. The agency could nearly double the amount of renewables in its carbon-reduction targets for states, from 12 percent of 2030 electric generation to 23 percent. The UCS analysis isn’t just wishful thinking. It’s based on the actual pace of renewables growth in the recent past, as well as state laws in place that require particular increases in renewables. As the National Wildlife Federation points out in its comment on the UCS study, the EPA’s targets for renewables fall short of what the U.S. Energy Information Agency projects will happen under a business-as-usual scenario. Why do less, when we can do much more?

The best news in the study is that by raising the targets for renewables, EPA can dramatically boost the efficacy of the Clean Power Plan overall. Rather than reduce carbon emissions just 30 percent from 2005  levels by 2030, the Plan could achieve a 40 percent reduction. That’s because the Plan works primarily by replacing coal with another fossil fuel — natural gas. If we go further and replace some of that natural gas with renewables (and reduce the need for electricity with energy efficiency measures), we can make much more significant, sustainable reductions in carbon emissions.

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